Facts:

The facts of the case revolve around a telegraphic conversation between Harvey and Facey regarding the sale of a property by name Bumper Hall Pen (hereinafter The Property) which is in Jamaica. It consists of three statements.

Harvey: Will you sell us the Bumper Hall Pen? Telegraph lowest price

Facey: Lowest price for Bumper Hall Pen is €900.

Harvey: We agree to purchase the Bumper Hall Pen at the price stated by you.

At the refusal of Facey to sell The Property to him, Harvey sued Facey.

Main Issue:

The main issue was whether there a valid and explicit offer on part of Facey.

There was no valid offer on part of Facey to sell the Bumper Hall Pen to Harvey at the price of €900. This was held by the Queen in Council (hereinafter The Privy Council), where the appellants appealed after seeking leave from the Supreme Court of Judicature of Jamaica.

The section in the Indian Contracts Act, 1872 which is related to the subject of the present case is Section 3: Communication, acceptance and revocation of proposals which states that “The communication of proposals the acceptance of proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any act or omission of the party proposing, accepting or revoking by which he intends to communicate such proposal, acceptance or revocation, or which has the effect of communicating it.”

In this case, we notice that there was no proper acceptance of a proposal as per the stated section.

To further understand the issue clearly, the judgement of The Privy Council has to be taken into consideration.

The Privy Council held that the answer of Facey wherein he stated the price of the property was not an indication of acceptance. It merely was a response to the question asked by Harvey. Thus, this would mean that no contract had been entered into by Harvey and Facey.

Reasoning Behind the Privy Council’s Judgement:

The facts of the case as mentioned above revolves around a telegraphic conversation between Harvey and Facey that consists of three statements. Of the three statements, the first statement consists of two parts, whereby the first part is an enquiry made by Harvey with regard to the willingness of Facey to sell The Property. The second part is a statement that asks Facey to telegraph the lowest price for which Facey is willing to sell the property.

The court stated that Facey’s answer, that is the third statement in the telegraphic conversation was an answer, not to the first part of Harvey’s questions but to the second part which requested the telegraph from Facey that stated the lowest price for the sale of The Property. Thereby, Facey never had accepted to sell The Property.

Also, an aspect which is noticeable and also was held by the Court in its reasoning was the lack of intention to contract on part of Facey when he sent the telegram that stated the price of The Property to be €900.

It is a well-settled principle in English Law that “to create a contract there must be a common intention of the parties to enter into legal obligations.” This was also held by Lord Atkin J in the case of Rose & Frank Co v J.R. Crompton & Bros Ltd.1

The lack of common or mutual intention is seen significantly in this case. The same lack was observed by The Privy Council. The observation also was used by The Privy Council to substantiate its statement that there existed no contract between Harvey and Facey.

The Court also stated that the agreement could have become valid only if Facey had responded to the first part of Harvey’s first telegram which was the enquiry to Facey as to his willingness to sell The Property.